Sri Lanka Information

ECONOMY OVERVIEW 

SRI LANKA’s OVERALL ECONOMIC PERFORMANCE in 2018

Sri Lanka has reached the status of Middle-Income country with a GDP per capita of USD 4,073 (2017) and has a service oriented economy, which is responsible for a little over 60 % of the GDP. Sri Lanka has a total population of 21.4 million people. Sri lanka’s major exports are apparel, tea, information technology, rubber related products, spices, gem and jewelry, etc. Two major foreign exchange earners are Sri Lankan’s expatriate’s foreign remittances and tourism. In October 2018, the adventure experts at Lonely Planet named Sri Lanka as the No. 1 country to visit in 2019.

After the end of the Sri Lankan civil war in 2009, Sri Lanka’s economy grew at an impressive average 5.8 percent during the period of 2010-2017, reflecting a peace dividend and a determined policy thrust towards reconstruction and growth. The economy is transitioning from a predominantly rural-based economy towards a more urbanized economy oriented around services and manufacturing. The country has made significant progress in its socio-economic and human development indicators. Sri Lanka is one of the first countries in the South Asian region to fulfill its commitment to millennium development goals outperforming other South Asian countries. Sri Lanka’s social indicators are currently among the highest in South Asia and compare favorably with other middle-income countries.

Economic growth has translated into shared prosperity with the national poverty headcount ratio declining from 15.3 percent in 2006/07 to 4.1 percent in 2016. Extreme poverty is rare and concentrated in some geographical pockets. However, the year 2017 recorded a dismal performance, and according to statistics released by central bank of Sri Lanka, the economy grew only by around 3.1% in 2017 well below the projections done by The Asian Development Bank (ADB) and International Monetary Fund (IMF), which forecasted a growth of 4.2% and 4.8% respectively. The major reasons for this major setback are natural disasters such as drought, floods and policy tightening.

Key Measures taken by Government of Sri Lanka 

The government of Sri Lanka has made some structural reforms supported by the International Monetary Fund (IMF) to address the key structural problems in the economy such as twin deficits. The introduction of the new Inland Revenue Act which leads to revenue-based fiscal consolidation and an automatic fuel pricing formula are two positive reforms under this program.

 In September 2018, the Government launched ‘Vision 2025’. The program planned to address constraints to growth over the next three years, consistent with IMF program. According to experts, these structural reforms may have an impact on the economic performance on the short-term, though they have constructive impact on medium to long term on overall economy. Another notable feature under the Vision 2025 is GOSL launched Trade portal for dissemination of information on international trade and much awaited national export strategy clearly identifying six (6) areas of preference for future export growth.


Key Economic Indicators

INDICATOR

2011

2012

2013

2014

2015

2016

2017

OUTPUT 

GDP at current market price (US $ billion)

65.3

68.4

74.3

79.4

80.6

75.9

80.68

 GNI at current market   price (US $ billion)

64.6

67.2

72.5

77.6

78.5

76.0

80.7

Per Capital GDP at market price (US $)

3129

3351

3160

3821

3843

3835

Not Available

 Per Capital GNI at   market price (US $)

3094

3291

3524

3734

3746

3732

Not Available

 REAL OUTPUT

GDP Growth Rate (%)

8.4

9.1

3.4

4.9

4.8

4.3

3.1

Sectorial growth rate

Agriculture

Industry

Services

 

4.6

9.3

8.9

 

3.9

9.0

11.2

 

3.2

4.1

3.8

 

4.9

3.5

5.2

 

5.5

3.0

5.3

 

7.1

26.6

56.8


6.9

26.8

56.8

 

 

AGGREGATE DEMAND AND SAVINGS 
(percent of GDP)

Investment (as % of GDP)

Private

Government

 

79.8 

71.3

8.6

 

72.8 

65.2

7.6

 

75.4 

67.6

7.8

 

76.0 

67.7

8.3

 

77.4 

68.6

8.8

 

75.0

66.5

8.5

75.2

67.1

8.1

 

PRICES AND WAGES 

GDP Deflator (% Change)

3.8

10.8

6.2

3.9

2.1

3.8

5.9

Colombo Consumers’ Price Index (2006/07=100)- annual average

6.7

7.6

6.9

3.3

0.9

2.2

Not Available

EXCHANGE RATES

Annual Average Rs/ US $

110.57

127.60

129.11

130.56

135.94

144.47

151.54

Rs. /  Thai Baht (year-end)

3.58

4.15

3.98

3.99

4.02

4.18

4.38

                        

                                Source: Statistic Department - Central Bank of Sri Lanka/Ceylon Chamber of  Commerce

Economy by Sectors
Of the total GDP of around US$ 11,183 billion, agriculture contributes 9% of the overall GDP, while the industry sector shares 16.5% and the services sector shares 62.6% of the GDP8.